PublicInvest Research

PublicInvest Research Headlines - 7 Sept 2021

Publish date: Tue, 07 Sep 2021, 09:36 AM
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.

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EU: Germany factory orders expand unexpectedly . Germany's factory orders expanded unexpectedly in July driven by the robust demand from non-euro area economies, data from Destatis revealed. Factory orders grew 3.4% on a monthly basis, confounding expectations for a decline of 1%. However, the pace of growth was weaker than June's revised expansion of 4.6%. New orders reached the highest level since the beginning of the time series in 1991, Destatis said. The marked MoM increase was caused by major orders. Excluding major orders, there was a decline of 0.2% in July. The increase in July was solely due to a jump in the always very volatile orders for the "other vehicle" sector, Ralph Solveen, an economist at Commerzbank, said. (RTT)

EU: Eurozone Sentix investor confidence weakens for second month . Eurozone investor confidence deteriorated for the second straight month in Sept, survey data from the behavioral research institute Sentix showed. The investor confidence index fell to 19.6 in Sept from 22.2 in the previous month. The expected reading was 19.7. The current situation index held steady at 30.8 in Sept. On the other hand, the expectations index fell to 9.0 from 14.0 a month ago. This was the fourth consecutive fall in expectations. The survey was conducted among 1,070 investors between Sept 2 and 4. German investor confidence also weakened in Sept. The corresponding index slid to 20.9 from 25.7 in the previous month. (RTT)

UK: Construction sector expands at slower pace in Aug . The UK construction sector growth slowed in Aug as restricted supply of materials and transport began to weigh on overall activity, survey  results from IHS Markit showed. The Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell to 55.2 in Aug from 58.7 in July. The reading was also below economists' forecast of 56.9. There were softer expansions across housebuilding, commercial work and civil engineering activity. Commercial work was the best performing broad category of construction output. Meanwhile, civil engineering remained the slowest growing sub-sector. Total new work increased for the fifteenth consecutive month in August. (RTT)

UK: New car sales fell 22% in Aug, preliminary data shows . British new car registrations in Aug fell 22% YoY, preliminary industry data showed, with the sector still battling pandemic-related supply difficulties. Over the first eight months of the year the market is up about 20% from 2020, the Society of Motor Manufacturers and Traders (SMMT) said, though numbers remain below pre-pandemic levels as the sector contends with semiconductor chip shortages caused by the coronavirus crisis. Demand is normally quiet in August because many buyers wait until the licence plate series is updated in Sept, one of the two annual updates. (Reuters)

China: Export, import growth likely eased in Aug on Covid-19 cases, supply bottlenecks . China's export growth is expected to have moderated in Aug amid port congestion caused by fresh COVID- 19 cases, a Reuters poll showed, while the pace of imports also slowed, highlighting the growing pressure on the world's second largest economy. The forecast slackening in overall trade add to a flurry of soft Chinese data since July and is likely to reinforce market expectations for more near-term support measures to revitalise the flagging economic recovery. Exports are expected to have risen 17.1% in August from a year earlier, the median forecast in a Reuters poll of 31 economists showed, compared with growth of 19.3% in July. The data are due out on Tuesday. (Reuters)

Thailand: Aug CPI dips for first time in 5 months on subsidies . Thailand's headline consumer price index (CPI) unexpectedly dropped for the first time in five months, down 0.02% in Aug from a year earlier, due mainly to government subsidies, the commerce ministry said. The reading compared with a forecast for a rise of 0.34% in a Reuters poll and followed July's 0.45% increase. The CPI was dragged down by government measures to lower living costs, particularly a subsidy on tuition fees and utility bills, as well as lower prices of some food items, the ministry said. (Reuters)

Australia: Faces renewed taper talk as sluggish rebound looms . Australia’s central bankers are set to revisit the question of whether to delay a planned taper of bond purchases as a worsening outbreak of the delta variant dims prospects of a rapid economic rebound. Ten of 16 economists surveyed by Bloomberg expect the Reserve Bank of Australia will defer scaling back quantitative easing. That’s despite Governor Philip Lowe saying after August’s meeting that the impact of such a move wouldn’t help the economy much and that the government was better placed to offer support. (Bloomberg)


KLK (Outperform, TP: RM25.51): Completes 56.2% stake buy in IJM Plantations, to extend full takeover offer. Kuala Lumpur Kepong (KLK) said it has completed the acquisition of a 56.2% stake in IJM Plantations from IJM Corp. The group is now obliged to extend a mandatory general offer to acquire the remaining stake in IJM Plantations at RM3.10 per share. (The Edge)

YB Ventures: ICULS issuance oversubscribed by 46.6%, raises RM48.4m for expansion. YB Ventures received 46.6% more subscriptions for the company's rights issue of ICULS at 4sen per share. YVB will raise about RM48.4m, exceeding the minimum subscription level to be raised of RM7.5m. (BTimes)

Sedania: Bags six-year contract from Pos Malaysia. Sedania Innovator has signed a six-year contract with Pos Malaysia to reduce energy consumption on a shared saving concept. The company said it would provide its technology through its energy performance contract (EPC) framework. (BTimes)

RGT: To acquire remaining 40% in subsidiary for RM85m via share issuance. RGT said it wants to acquire the remaining 40% stake in its main subsidiary Rapid Growth Technology SB for RM85.6m via the issuance of 267.5m new RGT shares at 32 sen apiece. (The Edge)

MGB: Secures another housing contract in Dengkil from LBS Bina worth RM112m. MGB said today it has received a contract for a housing development in Dengkil worth RM112.5m from a unit of its major shareholder LBS Bina Group. With the latest contract, MGB said its outstanding order book now stands at RM1.87bn. (The Edge)

Foundpac: Buys stake in cable maker. Foundpac is buying a 70% stake in a manufacturer of accessory cables and connectors for RM8.4m. The purchase would give the company a foothold in the wire and cable market, as well as the opportunity to cross sell its products. (StarBiz)

Teladan Setia: Expands landbank in Jasin, Melaka. Teladan Setia has entered into a deal to acquire five parcels of leasehold land in Jasin, Melaka for RM117.9m. The properties totalling 338.3 acres are located near the company’s existing developments. (StarBiz)

Hubline: Secures RM26m contract to provide helicopter services for Sarawak polls. Hubline has secured a RM25.67m contract from the Election Commission (SPR) to provide helicopter and fixed wing rental services for the Sarawak state election. The group said the contract, awarded to its subsidiary Layang Layang Aerospace SB, spans two years until Aug 2023 in view of the uncertainties as to when the polls can take place due to the pandemic. (The Edge)

IPO: CEKD to buy KL factory to consolidate operations. ACE Market-bound CEKD intends to buy a factory here for RM8.8m in the next two years to streamline its operations. the factory was for its wholly-owned Hotstar (MS) SB, which manufactures diecutting moulds and tools. (BTimes)

Market Update

The FBM KLCI might open higher today after European equities had their biggest rise since late July on Monday as weaker-than expected US jobs data suggested pandemic-era stimulus, which has helped prop up markets, may continue for longer than anticipated. The Stoxx Europe 600 index gained 0.7%, the region wide benchmark’s best day in six weeks. Employers in the US added 235,000 jobs in August, which fell wide of economists’ projections of more than 728,000 new hires. London’s FTSE 100 index also ended the session 0.7% higher while US markets were closed for Labor Day. In the regional equity markets on Monday, Chinese shares rallied after Vice-premier Liu He said the government would continue to support private businesses despite a regulatory crackdown across the technology and education sectors. The CSI 300 index of mainland Chinese stocks climbed 1.9%. Japan’s Nikkei 225 gained 1.8% as investors bet that last week’s abrupt resignation by Prime Minister Yoshihide Suga would usher in a successor more focused on protecting the nation’s economy from rising Covid-19 cases. Bursa Malaysia bucked the regional market trend to end lower, succumbing to selling pressure on heavyweight stocks. At 5pm, the benchmark FBM KLCI was down 7.6 points or 0.48% to 1,581.59 from last Friday’s close of 1,589.19. Elsewhere, Singapore’s Straits Times Index gained 0.51% to 3,097.72, Hong Kong’s Hang Seng Index increased 1.01% to 26,163.63 and South Korea’s Kospi added 0.07% to 3,203.33.

Source: PublicInvest Research - 7 Sept 2021

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